Guest AuthorThe Cato Institute published a study in August of this year that further illustrates how the United States is sliding ever closer towards becoming an entitlement nation. According to the Work vs. Welfare Trade-off: 2013, in 35 states across America the US welfare system pays recipients more than they would otherwise earn from having a full-time, minimum-wage job.
Cato is quick to point out, however, that “contrary to stereotypes, there is no evidence that people on welfare are lazy or do not wish to work.” Rather, many welfare recipients lack skills necessary to obtain jobs that pay average or above-average wages, and are reluctant to accept entry-level, minimum-wage positions, often in the service or retail industries, so long as the level of welfare benefits makes the choice not to work a rational alternative. As one of the study authors suggests, “While poor people are not lazy, they are not stupid either.”
Ironically, a week after the Cato study release, Susan Thurston of the Tampa Bay Times reported that approximately 650 people recently applied for 95 new job openings, many of which listed as minimum-wage or near minimum-wage, at the new Walmart Neighborhood Market in Pinellas Park. So what gives? Do these folks not understand that doing nothing affords them more opportunity than working?
Perhaps local job applicants know that the Florida Legislature has worked to shrink the gap between the value of welfare and work by reducing benefits and strengthening eligibility requirements – Florida ranks 46 out of 51 states plus DC in total welfare benefit packages, according to Cato. More likely, however, is that these applicants realize entry-level does not necessarily equal eternity-level for many companies that prioritize promoting employees from within. According to the Times article, about 75% of Walmart’s managers start as hourly associates and the pay for store managers ranges from $50,000 to $170,000 per year, with the top-paid manager earning $250,000 last year.
Despite offering low-wage workers the opportunity for economic advancement, Walmart, like many other service and retail companies seeking expansion, is often “welcomed” to a new community by neighborhood activists protesting against company wages, benefits and other Not In My Backyard (NIMBY) gripes of increased traffic or a perceived negative impact to some loosely defined “quality of life.” The recent courtship by Hillsborough County leaders of Bass Pro Shops and its 1700 new construction and permanent jobs was attacked by various community opponents who argued Bass did not offer the kind of high wage jobs that merit economic development incentives or that would help potential workers move up the economic ladder. So much for equality of opportunity.
No one denies that high wage jobs are better than low wage jobs, or that long-term workforce solutions must involve accessible and affordable education and vocational training, but to deny that there will always be a significant population of citizenry seeking unskilled or minimum wage work is to deny reality. Each and every day, a cross section of Americans enters and re-enter the workforce at entry-level positions with the goals of learning new skills, advancing their marketability and earning higher pay. This is the essence of the American Dream – that if you work hard and play by the rules, you can create a better life for you and your children. Tragically, however, many Floridians no longer believe that the American Dream is attainable for them, and they need listen no further than to the latest class warfare-spewing pundit for this belief to be reaffirmed.
While Florida stands ahead of the curve on welfare reform, there are other measures that state and local leaders can adopt to maximize economic opportunities for all classes of workers – skilled and unskilled. First, elected leaders can do a much better job tuning out NIMBY detractors (usually a small, yet very vocal constituency) and their myriad opposition to job-producing development projects. With Florida unemployment figures still over 7%, Florida simply needs all the jobs it can get. Denying job-producing economic opportunities, particularly to those lower-wage workers who need opportunities the most, only serves to expand the work vs. welfare trade-off.
Second, state and local economic development policy should benefit all prospective workers and job creators – not just “targeted” industries. Rather than picking winners and losers, government should evaluate economic development incentive opportunities based on whether a prospective project meets a pre-determined expected rate of return. If investment and incentives yield the required return, it’s a good deal; if not, it’s no deal. The same standards should apply to all applicants – lower-wage workers and job creators deserve the same economic opportunities as higher-wage workers and job creators.
Finally, for every politician that decries the death of the American Dream, there needs to be another who extolls the importance of a job, even a minimum-wage job, as a springboard out of poverty. According to Cato, only 2.6 percent of full-time workers are poor, as defined by the Federal Poverty Level standard, compared with 23.9 percent of adults who don’t work. Entry-level and minimum-wage jobs are a necessary starting point for those without job skills who, absent of a job, would push the 23.9 percent poverty figure even higher.
All honest work performed well is honorable. Government policy must recognize all work as honorable by affording the same economic opportunities to all workers and job creators, regardless of wage levels, and in spite of NIMBY activism and anti-poverty demagoguery. Failure to do so only exacerbates the work vs. welfare tradeoff and expedites America’s fall further down the road of dependency.
